After a year of pain and drama we have become a more honest country

OUT here in the real economy, the worldly-wise knew in mid-2007 that the Celtic Tiger was dead. Property prices started to fall, spending slowed, job losses accelerated and business sentiment turned sour.

Car dealers, hoteliers, shopkeepers and building workers knew the economy was starting to run on empty. Blue smoke was being emitted from our economic engine. We learned the global financial system had been operating schemes of pyramid selling for more than a decade. The whole house of cards collapsed — resulting in a halving on average of personal and corporate wealth.

Up to mid-2009 our political leaders and official Ireland were in denial. They refused to accept that our economic miracle was mostly a property and credit bubble. When it burst, there was little left only debt. This comprised mostly private and personal indebtedness of more than €400bn. We now know there aren’t the assets, cash or incomes to cover these liabilities. Our personal and corporate balance sheets are fractured. Like a cancer patient who refuses to believe the bad news, further professional opinions were sought. A paralysis of analysis ensued. Commissions, taskforces, consultants, think-tanks and committees provided a wall of obfuscation.

The most chilling and abrasive expert opinion came from Colm McCarthy and An Bord Snip. Only this autumn did the Government and opposition accept that nothing short of fiscal chemotherapy was obligatory. The cuts in public sector pay and welfare represent the first transfusions. We will suffer painful symptoms of deflation, sectoral conflict and industrial unrest. But at least the Irish economy and public finances are starting to receive doses of necessary medicine to provide a basis for recovery. This mirrors what has happened in every aspect of commerce.

This was a brutal year in business. Examinerships, receiverships and liquidations of young and long-established enterprises have been endemic. Others teeter on the brink of a similar fate. Cash was always king. Now cash is survival and in short supply. The domino effect of bad debts and breaches of covenants have led to insolvent financial institutions. The aggregate net value of all the Irish institutions covered by the state bank guarantee is a minus figure. This was unthinkable a few years ago. Some problems are so severe that they cannot be crystallised up front at the present time. NAMA merely represents a technique to facilitate write-offs and buy time. The politics of 2009 reflected the public response to these startling economic trends. After a dozen consecutive years in power, Fianna Fáil has seen its dismal opinion poll ratings converted to electoral ruin. The local elections resulted in Fianna Fáil losing 84 seats, off the lowest previous base in 2004, to a mere 218 councillors. From a position of relative parity after exceptional successes in 2004, Fine Gael won a further 47 seats to secure 340 councillors. Labour won an extra 31 seats to amass 132 public representatives. The Green party was annihilated with no representation in major urban areas and a meagre total of three seats nationally.

FF faced more decimation in the two Dublin by-elections. Maurice Ahern’s disastrous result represents the most eloquent localised rejection of Bertie Ahern’s legacy. The electorate neither forgot nor forgave. George Lee’s 27,000 poll tally was an unprecedented middle class backlash. The loss of Eoin Ryan’s MEP seat in Dublin was without parallel in previous European elections since 1979. Sinn Féin also ended up losing its seat to Joe Higgins and is without representation in the European parliament. The significance of these localised results cannot be understated. Behind the statistics a whole new generation of opposition public representatives will develop into future Dáil deputies. These strong local candidates will emerge in the next general election.

There is an inexorable and almost inevitable march of Enda Kenny and Eamon Gilmore towards Government Buildings. A key development in 2009 was the Labour party’s decision emphatically to rule out a future coalition with FF. This means, de facto, that FG and Labour have to combine their forces during and after the next election.

Even if FF could ameliorate their seat losses to 20 or less, there is no coalition partner to bring the numbers up to a majority of 83 seats. Even worse for FF, the previous trend whereby Bertie Ahern obtained FF transfers from all other parties and candidates was obliterated in this year’s poll results.

This was also a watershed year for the Catholic Church. The final reports of the Ryan and Murphy commissions delivered systematic, painstaking and conclusive evidence of physical and sexual abuse of young people in its care. The 18 religious congregations had laid bare their brutal, vicious assault on the innocent in their care. The full horror of decades of perversion and violence were exposed.

The diocese of Cloyne and Archdiocese of Dublin were also indicted with the revelation of evil perpetrators. The most appalling feature of these reports was the subsequent denial and cover-up of the facts. Victims were scapegoated as liars. The sanctimonious cloak of respectability of the church was used to smother decades of allegations. The reality of church/state relations had already altered over the past 20 years. The decline in practice and attendance in church was evident. The unwillingness of the Vatican and the hierarchy to facilitate an ‘a la carte’ approach to modern immorality has rendered church teaching as outdated and somewhat irrelevant to real life. The result of the publication of these reports on abuse has cemented a deep fracture in public attitudes to the church. A belt of the crozier is now almost a badge of honour.

YET amid this unmitigated gloom for clerics, there was one incident which shone like a bright beacon. The “walk of atonement” by the Augustinian Fr Michael Mernagh from Cobh to Dublin was a joy to behold. His utter humility and sincerity reflected the reality of so many genuine people in the church.

These moments of truthful reckoning throughout 2009 — economically, politically and socially — are all for the better. After this year of pain and drama, Ireland has become a more honest place. We have more transparency about the true state of our economy, government finances, business ethics and church life. A lot of the pretence in our public affairs is disappearing. The notion that partnership delivered cost-effective public administration and national competitiveness has been debunked. Change is always resisted, despite its necessity. The adoption of the Lisbon Treaty represented a high point in our maturity and sent out a positive image of our nation.

Let’s not forget the sporting joys: Ireland’s Grand Slam rugby success; Leinster’s Heineken Cup victory; Sea The Stars’ invincibility in six Group 1 races; Kilkenny’s four-in-a-row; Kerry’s perennial mid-summer revival; Trapattoni’s renaissance of the Irish soccer team and Bernard Dunne’s roller-coaster bouts. Both Bruce Springsteen in the RDS and U2 in Croke Park lit up a wet summer. While Jedward ... are Jedward.

All in all, if we keep taking the transfusions, we can make a full recovery.